LAW TO PROMOTE SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT LAW NO Courtesy translation provided by WIPO 2012 TITLE I. Principles CHAPTER I.

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1 LAW TO PROMOTE SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT LAW NO Courtesy translation provided by WIPO 2012 TITLE I Principles CHAPTER I Aims Article 1: For the purposes of the scientific and technological development that this Law seeks to promote, the general aim shall be to facilitate scientific research and technological innovation, leading to greater economic and social progress within the framework of a strategy of comprehensive sustained development, in order to preserve the country s natural resources for future generations and guarantee that Costa Ricans enjoy a better quality of life and well being and to enhance their knowledge of themselves and of society. Article 2: The long term goal of scientific and technological development shall be to create the necessary conditions for the implementation of a policy in this respect. Article 3: The specific goals of scientific and technological development shall be the following: (a) to guide the definition of specific policies for the promotion and fostering of scientific and technological development in general; (b) to support scientific and technological activities carried out by any private or public entity, national or foreign, which contribute to scientific and technological exchange with other countries or which are linked to national development goals;

2 2 (c) to provide stimuli and incentives for the private and public sectors and for university institutions of higher education and other educational centers, with a view to enhancing capacity to generate science and technology and encouraging links between such bodies; (d) to create the appropriate conditions to ensure that science and technology can play their key role as basic factors in the achievement of greater competitiveness and growth in the national productive sector; (e) to stimulate technological innovation as an essential element for building national capacity, adapting to changes in international trade and the global economy and raising the living standards of Costa Ricans; (f) to stimulate technological innovation at the national level with a view to converting Costa Rica s productive sector and enhancing the country s capacity in terms of competitiveness, in order to meet the basic needs of the population; (g) to encourage all activities that support substantive scientific and technological development; post graduate studies and human resource development, the improvement of the teaching of the sciences, mathematics and technical education, as well as scientific and technological documentation and information; (h) to support any measures designed to encourage greater creativity and original scientific thinking on the part of Costa Ricans; (i) to promote regional development in the country by means of the use of appropriate technologies for the development of agricultural, agro industrial, forest and aquacultural activity and related industry in rural areas; (j) to foster and support ethical, legal, economic, scientific and social research in general, aimed at improving understanding of the relationship between science, technology and society, as well as

3 3 the applicable legal framework in this field, with a view to revitalizing the role of science and technology in respect of culture and social well being; (k) to foster any activities which support the process of technological innovation: technology transfer, consultancy and engineering, standardization, metrology and quality control and other scientific and technological services. CHAPTER II Duties and responsibilities of the State Article 4: In accordance with the aims of the present Law, the State has the following duties: (a) to ensure that science and technology serve Costa Ricans, guarantee their well being and allow them to increase their knowledge of themselves, nature and society; (b) to formulate national science and technology programs, in consultation with the public and private entities and bodies that make up the National Science and Technology System, as an integral part of national development plans; (c) to provide the specific tools for encouraging and stimulating research, knowledge transfer and science and technology as fundamental prerequisites for development and as elements of universal culture; (d) to foster, guarantee and promote constitutional freedom of teaching and scientific and technological research; (e) to promote coordination between the private and public sectors and the research centers of State institutions of higher education, in order to inform, guide and promote policies on science and technology for the various sectors of society;

4 4 (f) to establish policies for scientific and technological development, oversee their implementation and evaluate their impact and results, within the framework of the national development strategy; (g) to foster the creative capacity of Costa Ricans, through the support of relevant scientific, educational and cultural programs and activities and through the granting of awards and prizes to those who make a valuable contribution to national development in the field of science and technology; (h) to encourage the drafting of suitable legal instruments for the promotion of scientific and technological development; (i) to make specific budgetary provision for funds which State institutions and bodies shall earmark and administer for scientific and technological research and development activities; (j) to foster the technology management capacity of public and private firms, universities and research and development centers, with a view to achieving the industrial conversion and modernization of the agricultural and forestry sector and increasing national productivity; (k) to use the purchasing (goods and services) and bargaining power of public sector entities to encourage national corporate strengthening of the technological base, the appropriate use of consulting and engineering capacity and the delivery of national technical and professional services; (l) to encourage the selective incorporation of modern technology in the public administration, with a view to streamlining and updating public services on a constant basis, in conjunction with administrative reform, in order to modernize the national State apparatus, with a view to boosting efficiency;

5 5 (m) to facilitate scientific and technological exchange between Costa Rica and the global community, so as to benefit from the most valuable experiences and achievements of other countries. Article 5: All entities related to science and technology, as well as State public bodies, may cooperate with regard to compliance with this Law, in accordance with their nature and powers. Article 6: In accordance with the current National Science and Technology Program, the State shall encourage studies, applications and the development and creation of companies in the areas of the new technologies that are necessary for the country s development. TITLE II Organizational mechanisms for scientific and technological development CHAPTER I The National Science and Technology System Article 7: The National Science and Technology System is hereby established, within the framework of the sectorization of the State. The System shall consist of the body of institutions, entities and organs of the public sector, the private sector and research and higher education institutions, which carry out their main activities in the field of science and technology or which earmark part of their budget and human resources for scientific and technological activities. Article 8: The non profit scientific and technological activities carried out by the entities which form part of the National Science and Technology System are hereby declared to be of public interest. Article 9: In accordance with the National Planning Law, the overall aim of the National Science and Technology System shall be to coordinate and implement all those provisions established by higher political bodies, as well as to integrate measures taken by individuals for the coordination of scientific development and for the application of scientific and technological knowledge for national social and economic well being.

6 6 Article 10: The National Science and Technology System shall promote coordination of the interests of the bodies and entities from the above mentioned sectors and their cooperation, with a view to ensuring national coordination in the field of science and technology for comprehensive national development. Guidelines and policies shall be established that shall be binding for the public sector and indicative for the private and higher education sector. Article 11: The Minister of Science and Technology shall be in charge of the System and shall maintain the necessary communication ties with each of the Ministros Rectores (Ministers responsible for directing, coordinating and ensuring compliance with public strategies and policies in a given sector) in charge of the various sectors of the Public Administration, with a view to coordinating scientific and technological development activities with sectoral policies and their outcomes. Article 12: Without prejudice to the autonomy granted under Article 84 of the Constitution, State universities shall form part of the National Science and Technology System, solely to participate in its deliberations, in order to ensure the necessary coordination through the appropriate legal mechanisms. Article 13: In order for a private institution of higher education to belong to the National Science and Technology System and benefit from the advantages afforded by this Law, it shall have at least one research center that is certified as such, according to the regulations of this Law, in the opinion of the National Board for Scientific and Technological Research (CONICIT). In addition, it shall earmark part of its budget for research and development. Article 14: Private institutions of higher education which form part of the System shall comply with the general guidelines and policies of public interest in respect of professional training in the fields of science and technology. Article 15: The Ministry of Science and Technology shall be the body that defines mechanisms and levels of coordination, assessment and implementation, with a view to ensuring cooperation between the sectors involved in national scientific and technological activities, as well as to establishing its sphere of competence and its organizational structure.

7 7 CHAPTER II National Science and Technology Program Article 16: The National Science and Technology Program shall be the instrument for planning scientific and technological development that the Government of the Republic shall propose during its administration. It shall put forward a short, medium and long term vision making it possible to lend continuity and scope to the efforts of the public, private and higher education sectors in this field. Article 17: The Program shall form an integral part of the National Development Plan, and, based on its guidelines concerning social and economic development, shall contain the objectives, policies, strategies and action plans translated into specific projects for the period in question. Article 18: The Program shall be compulsory for the public sector and optional for the private sector and for State university institutions of higher education, in respect of the institutional autonomy enshrined in the Constitution. Article 19: During its preparation, the Program shall be subject to the various levels of coordination of the sectors which make up the National Science and Technology System, with a view to ensuring the harmonization of the interests and initiatives represented therein. CHAPTER III Ministry of Science and Technology Article 20: The main duties of the Ministry of Science and Technology (MICIT) shall be as follows: (a) to define scientific and technological policy, by means of the use of the coordination mechanisms established by the National Science and Technology System, and to contribute to the mainstreaming of this policy into the country s overall economic and social policy, with regard to which it shall serve as a link and a direct partner with the higher policy making bodies of the Government of the Republic;

8 8 (b) to coordinate the work of the National Science and Technology System by means of the guidance exercised by the Minister of Science and Technology; (c) to prepare, implement and monitor the National Science and Technology Program, in accordance with the provisions of this Law and within the framework of the National Science and Technology System; (d) to grant, as the case may be, the incentives provided for in this Law by means of the signing of a contract for scientific and technological incentives, subject to the recommendation of the Incentives Commission; (e) to suggest, in consultation with the Ministros Rectores in charge of each sector, the percentage of the budget that the institutions referred to in Article 97 of this Law must earmark for science and technology, in accordance with the priorities of the National Science and Technology Program; (f) to promote the establishment and improvement of the legal and administrative instruments necessary for national scientific and technological development; (g) to support the Ministry of National Planning and Economic Policy (MIDEPLAN) in its work in the field of international technical cooperation, with the stimulus provided by the appropriate exploitation of such cooperation in scientific and technological activities; (h) to ensure compliance with this Law; (i) to fulfill any other function assigned to it by existing or future legislation. Article 21: The powers of the Ministry of Science and Technology (MICIT) shall be exercised by its Minister, unless they have been delegated by the same, or by regulatory provision, provided that such powers are not reserved for the Executive, according to the Constitution and Articles 27 and 28 of the General Law of Public Administration.

9 9 CHAPTER VI National Council for Scientific and Technological Research Article 22: The National Council for Scientific and Technological Research, an autonomous institution with legal personality and its own assets, shall be regulated by Law No of August 9, Article 23: The aim of the National Council for Scientific and Technological Research (CONICIT) shall be to promote scientific and technological development for peaceful purposes and in order to contribute to national social and economic progress. Article 24: The National Council shall support science and technology management, innovation and transfer as well as the generation of new knowledge, through the funding of research, the training of specialized human resources, consulting and scientific and technological information and other technical services. For such purposes, with the agreement of the Executive Board and in accordance with the respective regulations, it may grant loans to promote technological development and scientific research and donate equipment and material to non profit making laboratories or research centers in the public or private sector. Likewise, it may transfer to the beneficiary, in whole or in part, the intellectual property right arising from a research or development project, where such a project has been funded using resources from the said institution in special cases, in accordance with the regulations and with the agreement of the Executive Board. CHAPTER V Scientific and Technological Register Article 25: In order to guarantee cooperation with regard to decision making between the entities and bodies which make up the National Science and Technology System and to contribute to efforts to

10 10 keep all those concerned informed with regard to science and technology, a Science and Technology Register shall be established in which the following shall be recorded: (a) technology-based companies; (b) research and development centers or units in the private and public sectors; (c) classifications of human resources specialized in science and technology that include persons engaged in research; (d) scientific and technological research projects; (e) units providing scientific and technological services; (f) information on technical cooperation agreements, treaties and projects in the fields of science and technology; (g) information on public expenditure on science and technology; (i) technology transfer contracts signed with foreign companies; (j) information and documentation centers for science and technology; (k) any other aspect indicated by the regulations. The regulations of the Scientific and Technological Register shall define its functioning, its organizational structure and those cases where registration is compulsory in order to obtain the benefits provided for by this Law. Article 26: The National Council for Scientific and Technological Research (CONICIT) shall be responsible for administering and organizing the said Register. Article 27: The purposes of the Register shall be as follows: (a) to quantify the resources earmarked for science and technology, whether they be national or foreign, public or private, budgetary or extra-budgetary;

11 11 (b) to serve as a source of information for those interested in national scientific and technological activities, for the corresponding actions. Article 28: The private sector and the institutions and bodies of the public administration shall compile and systematize the information they have to use in their normal activities in the Register. Article 29: The signature of technology transfer contracts shall be compulsory for public companies and voluntary for private companies. TITLE III RESOURCES AND MECHANISMS TO STIMULATE SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT CHAPTER I Incentives Commission for Science and Technology Article 30: Within the National Science and Technology System and in order to facilitate the enforcement of this Law, an Incentives Commission for Science and Technology shall be set up, attached to the Ministry of Science and Technology and hereinafter referred to as the Incentives Commission, as part of the institutional economic policy framework of the Executive and as a complement to sectoral policies in industry, exports, agriculture, livestock and fisheries. Article 31: The purpose of this Commission shall be to classify and select natural persons or legal entities who/which are deserving of the incentives provided for by this Law, with the exception of the incentives granted under the regime for the promotion of researchers, as recommended to it by the National Council for Scientific and Technological Research (CONICIT). Article 32: In order to achieve the above-mentioned goal, the State shall have access to the resources allocated to the Ministry of Science and Technology and to the cooperation that shall be afforded by the public institutions belonging to the National Science and Technology System, in accordance with their founding acts.

12 12 Article 33: In order to achieve its goals, the Commission shall be advised by the technical experts and specialists from the National Council for Scientific and Technological Research, as well as by the institutions of higher education, private centers and specialized public centers, depending on the benefit to be granted and the competences of each of them. Article 34: The Incentives Commission shall be made up of representatives of the private, public and higher education sectors, as follows: (a) the Minister of Science and Technology or his representative, who shall chair the Commission; (b) two representatives of the Ministry of Finance, one from the General Directorate of Revenue and the other from the Budget Authority; (c) a representative of the Ministry of Agriculture and Livestock; (d) a representative of the Ministry of the Economy, Industry and Trade; (e) a representative of the National Council for Scientific and Technological Research (CONICIT); (f) three university representatives appointed by the National Council of University Rectors (CONARE); (g) a representative of the National Chamber of Agriculture and Agroindustry; (h) a representative of the Chamber of Industries of Costa Rica; (i) a representative selected by the Ministry of Science and Technology, from a short list submitted by the National Union of Chambers and Associations of Private Enterprise. Article 35: The administrative procedures of this Commission and appeals against its actions shall be regulated by the provisions of the General Law of Public Administration in every matter that does not contravene this Law.

13 13 CHAPTER II Incentive contracts for the promotion and development of science and technology Article 36: Incentive contracts for the promotion and development of science and technology, hereinafter referred to as the contracts, are hereby established as tools for granting the benefits set out in this Law to productive goods and services companies in both the public and private sectors. Such contracts shall be signed in accordance with the provisions of Article 38 of this Law and its Regulations. They shall not cover the incentives on offer under the regime for the promotion of researchers, such incentives giving rise to the signing of contracts with the National Council for Scientific and Technological Research, in accordance with Article 44 of this Law and its Regulations. Article 37: Incentive contracts shall indicate the incentives and stimuli that the State grants to natural persons or legal entities who/which are deserving of the benefits provided for under this Law. The contracts shall define the rights and obligations of both parties, in accordance with the provisions of this Law, its Regulations and the requirements of the Incentives Commission, laid down in Articles 30 et seq. of this Law. Article 38: Incentive contracts shall be authorized by the Incentives Commission upon the submission of applications qualifying within the National Science and Technology Program. They shall be signed by the Minister of Science and Technology, representing the State, and by the beneficiary or his representative. The maximum duration of such contracts shall be five years, and they may be extended in cases which qualify, if the Law and its Regulations so allow.

14 14 CHAPTER III Resources for funding incentives for the development of science and technology Article 39: The Incentives Fund for Scientific and Technological Development shall be established in order to grant funding for plans, programs and projects developed in light of the implementation of the present Law. The National Council for Scientific and Technological Research (CONICIT) shall receive the revenues from the Incentives Fund and shall include them in its annual budget and manage them by means of a special account with a State bank, with separate accounts, which shall be submitted to the Comptroller General of the Republic for consideration and approval. The Incentives Fund shall be financed from the following revenue sources: (a) the Executive shall include in the first ordinary or extraordinary budget which it sends to the Legislative Assembly following the adoption of this Law a share of not less than one hundred million Costa Rican colones ( 100,000,000), which shall be earmarked for achieving the goals of this Law. In the following ordinary budgets, this share may be increased by annual increments of fifty million Costa Rican colones ( 50,000,000), up to a maximum of two hundred and fifty million Costa Rican colones ( 250,000,000), which shall continue to be included in each ordinary budget; (b) donations, transfers, contributions and inputs by natural persons and legal entities, public or private, national or foreign. Public sector institutions shall continue to be authorized to include contributions for this Fund in their budgets, in addition to the specific budget earmarked for science and technology, in accordance with Article 97 of this Law. The amounts paid into the Fund shall benefit from the income tax exemptions established in Article 8(q) of Law No of April 21, 1988.

15 15 The last paragraph of this indent was tacitly repealed by the Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions (c) the special contributions which, in accordance with the Regulations, shall be paid in by companies that benefit from the incentives established in this Law, once they have achieved adequate growth and are established; (d) other forms of funding and taxes established for this purpose. The National Council for Scientific and Technological Research (CONICIT) is hereby authorized to sign contracts, create trusteeships and set up any other mechanism, if the legal system in force so allows, with a view to increasing and administering the resources of this Fund, receiving donations and funding, and benefitting from national or foreign cooperation in fulfillment of the objectives of this Law. CHAPTER IV Use of resources to encourage science and technology Article 40: The resources referred to in the preceding Article shall be intended for the following purposes, according to the provisions of this Law: (a) incentives for researchers, human resource training and research and outreach projects shall be utilized as follows: (1) salary incentives to improve the financial status of the persons conducting research; (2) additional grants for studies involving science and technology and postgraduate programs, in institutions of higher education, in order to encourage the training of human resources in these fields;

16 16 (3) support and funding for fairs, events and any activities for the dissemination and popularization of science and technology that are deemed to be in the national interest, including any such activities carried out by private entities, hereby declared to be of public interest; (4) co-funding for the Scientific Colleges; (5) funding of awards to encourage the dissemination of science and technology; (6) funding for the creation, development and maintenance of infrastructure, teams, human resources and the implementation of projects by centers, as well as for research and outreach units and programs in fields of national interest; (7) co-funding of projects involving research, technology transfer and information services which are carried out by State university institutions of higher education and non-profitmaking private scientific and technological entities, in basic or applied science and technology management. (b) incentives for building companies technological capacities, which are to be used as follows: (1) co-funding of technological innovation projects and projects involving the rational use of energy in goods and service companies. Amended by Law No of November 3, 1994 Regulating the Rational Use of Energy (2) co-funding of technology management for industrial restructuring and agricultural modernization; (3) co-funding of a venture capital fund to facilitate the creation of technology-based companies; (4) co-funding of national programs for new technologies and activities for the establishment and development of technology parks;

17 17 (5) co-funding of the technology transfer process for organized groups in rural areas by research centers of institutions of higher education; (c) other incentives which may be granted based on the provisions of this Law. Article 41: The Ministry of Science and Technology, as the body in charge of the National Science and Technology System, acting in consultation with the Incentives Commission and the Executive Board of CONICIT, shall define annually the percentage of resources created by this Law, to be allocated to each of the activities listed in the foregoing Article, taking into account the proposals of the National Science and Technology Program. Article 42: The percentages fixed for each heading according to the preceding Article shall be budgeted by The National Council for Scientific and Technological Research (CONICIT), in accordance with the provisions regulating this field, and their disposal shall be subject to the oversight of the Comptroller General of the Republic and the Ministry of Finance, as appropriate. TITLE IV Incentives for research, human resource training and scientific and technological development CHAPTER I Professional promotion and incentives for researchers Article 43: A promotion scheme for researchers, also known as the promotion scheme, is hereby created, which consists of a merit and performance scale to encourage nationwide training and integration of a highly qualified team of researchers, dedicated to the conduct of activities and projects in the fields of science and technology. Article 44: The National Council for Scientific and Technological Research (CONICIT) and the National Council of University Rectors (CONARE) shall jointly set the requirements for registration

18 18 and maintenance in the Promotion Scheme for Researchers in the respective Regulations, taking the following factors into consideration: (a) researchers shall be registered as such in the Scientific and Technological Register; (b) researchers shall carry out research projects for the entire period during which they receive benefits; (c) projects qualifying as being of national interest in accordance with the evaluation criteria of the respective regulations, in conformity with the National Science and Technology Program, or for their scientific value; (d) researchers shall sign contracts with the National Council for Scientific and Technological Research (CONICIT) and shall comply with the obligations stipulated therein. Contracts shall run for two years, but may be extended at the discretion of CONICIT depending on the quality of the results obtained by researchers. Article 45: The National Council shall classify, monitor and evaluate the activities of the researchers who participate in this promotion scheme. Article 46: The promotion scheme for researchers shall offer the following benefits: (a) financial compensation in addition to the salary received as a researcher in a scientific and technological research and development entity/body, in accordance with the scale established by the Regulations for said scheme. (b) repealed by Article 22(i) of Law No of July 4, 2001 on Tax Simplification and Efficiency (c) One-time exemption from all taxes, duties or surcharges for the import of a vehicle with a cylinder capacity of up to 1,600 c.c., which has been used for at least one year, and the household belongings of a researcher who has spent two consecutive years or more outside the Republic, engaged in research work or studies through which he has obtained the academic rank of a

19 19 master s, doctorate or the equivalent thereof, according to the assessment of the National Council of University Rectors (CONARE). The General Directorate of Revenue shall authorize the release of vehicles imported under this regulation, once five years have passed, beginning from the date of acceptance of the corresponding import permit. In the case of transfer to a third party that is subsequent to or simultaneous with the date of release, the purchaser shall pay only twenty-five per cent (25%) of the tax established under Article 10 of Law No of November 30, Tacitly repealed by Law No of March 31, 1992 on the Regulation of Exemptions in Force, Derogations and Exceptions Article 47: Incentives for researchers forming part of the promotion scheme for researchers, pursuant to the preceding Article, in the case of subparagraph (a), shall be granted by the National Council for Scientific and Technological Research (CONICIT). The Ministry of Science and Technology (MICIT) shall recommend that the Ministry of Finance arrange for the deductions and exemptions indicated in subparagraphs (b) and (c). Article 48: With a view to optimizing nationwide use of specialized human resources and linking the research sector to the productive sector, researchers who have received grants to study for a master s, doctorate or equivalent according to Article 46(c) shall exceptionally be authorized by the State university of higher education that has awarded the grant, upon their return, to meet their work commitment by working part-time for a national company, under an incentive contract, in accordance with this Law. For the above-mentioned purposes, there shall be an agreement between the institution, the company and the researcher, and the job, project or research to be carried out in the company shall be related to the specialized area of study of the researcher and shall be of interest for national development. Article 49: The benefits indicated in Article 46(c) shall be extended to national or foreign scientists or technical experts with proven expertise abroad in the field of science or technology,

20 20 whose entry into the country is deemed appropriate in the view of the National Council for Scientific and Technological Research (CONICIT), according to the provisions of the Regulations, provided that, when they enter the country, they carry out research or undertake to provide their services to an institution of higher education and sign a contract, in accordance with the provisions of the Regulations. Tacitly repealed by Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions Article 50: The exemptions referred to in Article 46(c) shall be forfeited if there is a change in the use of the exempted object, in which case the respective taxes shall have to be paid, without prejudice to the implementation of the penalties provided for in the Tax Code for cases of tax evasion. The National Council for Scientific and Technological Research (CONICIT) shall work together with the Ministry of Finance to ensure the correct use of exemptions. Tacitly repealed by Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions

21 21 CHAPTER II Scientific and technological training Article 51: The National Council for Scientific and Technological Research (CONICIT) shall fund an annual program of postgraduate grants concerning institutions recognized at the national level and abroad for their excellence in fields of interest in terms of national scientific and technological development and according to the priorities or guidance of the National Science and Technology Program. Such funding shall come from both international cooperation and new resources stipulated in this Law or other available resources. Article 52: The National Council for Scientific and Technological Research (CONICIT), acting in coordination with the National Council of University Rectors (CONARE) and in line with the principle of university autonomy, shall establish programs for the allocation of grants and other incentives aimed at increasing the percentage of students studying science and technology in State university institutions of higher education. Such programs shall be updated annually. Article 53: The Ministry of Science and Technology (MICIT) and the National Council for Scientific and Technological Research (CONICIT), acting in coordination with the National Council of Rectors (CONARE), shall propose to the Ministry of Public Education programs and projects aimed at improving the teaching of the sciences and technical education, as well as annual programs for strengthening events in areas of interest in terms of national science and technology, which could benefit from CONICIT funding. Article 54: The National Science and Technology Center shall be established with a view to disseminating advances in science and technology and ensuring the participation of Costa Ricans in such advances, as well as encouraging children, young people and adults to consider a career in research. The Ministry of Science and Technology, the National Council for Scientific and Technological Research (CONICIT) and State university institutions of higher education, as well as any other public

22 22 body, shall continue to be authorized to make transfers and donations and to provide the trained human resources required by the entity responsible for administering and managing the Center. Article 55: With a view to stimulating creativity, a research-oriented mindset, scientific thinking and science and technology skills in students, the National Science and Technology Fair shall be organized annually by the third and fourth secondary school cycles. The Ministry of Science and Technology (MICIT), the National Council for Scientific and Technological Research (CONICIT) and the Ministry of Public Education shall be responsible for organizing this event, in cooperation with the State university institutions of higher education. CHAPTER III Creation of Scientific Colleges Article 56: The Ministry of Public Education shall be authorized to sign agreements with State university institutions of higher education and other academic or scientific research entities recognized for their excellence, for the establishment of the Scientific Colleges of Costa Rica, which shall contribute to the achievement of the goals of diversified education, with an emphasis on scientific education. Article 57: The goal of the Scientific Colleges shall be to provide their students with a comprehensive education, imparting the highest Costa Rican values within the framework of an educational process which emphasizes the acquisition of solid knowledge and skills in terms of the basics of mathematics, physics, chemistry, biology and information technology (IT). The Colleges shall be promoted as an effective option for improving the teaching of the sciences, without detriment to other alternatives that may be developed. Article 58: The Higher Education Council shall be responsible for approving study plans, their respective programs and the regulations relating to evaluation and promotion, without prejudice to the

23 23 specific provisions which, within the legal framework, may be adopted by each College in accordance with this Law and the respective Regulations. Article 59: In order to achieve the goals set for the Scientific Colleges, general guidelines shall be established by the National Council of Scientific Colleges, which shall form part of the Ministry of Public Education and shall be responsible for the following: (a) promoting coordination and links between the Colleges; (b) encouraging the analysis of study plans and programs, with a view to achieving the highest possible level of academic achievement; (c) proposing appropriate changes to the plans and programs of the Scientific Colleges to the Higher Education Council; (d) issuing rulings on agreements on the establishment of Scientific Colleges prior to their signing; (e) establishing selection and admission criteria and requirements for the students of the Scientific Colleges; (f) appointing and removing the Executive Director of the National Council of Scientific Colleges; (g) ratifying the appointment of the institutional Executive Board proposed by the Academic Board of each college; (h) drafting and submitting to the Ministry of Public Education the regulations and provisions regulating the functioning of the Scientific Colleges and the National Council of Scientific Colleges. Article 60: The National Council of Scientific Colleges shall consist of: (a) the Minister of Public Education, who shall chair the Council;

24 24 (b) two representatives of the Ministry of Science and Technology; (c) a representative of the National Council for Scientific and Technological Research (CONICIT); (d) four university representatives appointed by the National Council of Rectors (CONARE); (e) a representative of the National Chamber of Agriculture and Agroindustry; (f) a representative of the Chamber of Industries of Costa Rica; (g) a representative chosen by the Ministry of Education from a short list submitted by the Union of Chambers and Associations of Private Enterprise. Article 61: In terms of organizational structure, the Scientific Colleges shall have, as a minimum, an Academic Council, an Administrative Board and an Institutional Executive, the specific functions of which shall be defined by means of regulations. The Colleges shall be responsible for selecting and appointing the teaching and administrative staff, who shall not be part of the civil service system. During the first four years of operation, the Colleges shall be partly funded from the resources established in Article 39 of this Law. During this period and thereafter, the State shall provide funding in the form of resources from the national budget. The Scientific Colleges shall have their own legal personality and shall be regulated by the provisions of this Chapter, by the Regulations issued for this purpose by the Ministry of Public Education, and by the respective agreements under which they are established.

25 25 CHAPTER IV Incentives for the dissemination of science and technology Article 62: Every two years, the National Council for Scientific and Technological Research (CONICIT) shall award a prize to the publishing or related firm that has best met the goal of dissemination of works of scientific and technological interest. The amount of the prize shall be established in the Regulations. CONICIT may decide not to award this prize. Article 63: The National Council for Scientific and Technological Research (CONICIT) may, on an annual basis, give special recognition to the promoters and organizers of the best activity or initiative in terms of the dissemination of science and technology, according to the provisions of the Regulations. Article 64: The awards established by this Law shall be granted without prejudice to other existing national prizes for science and technology or those which may be created at a later date. CHAPTER V Incentives to strengthen research and outreach units and centers Article 65: The National Council for Scientific and Technological Research (CONICIT) shall provide financial support for research and outreach programs and projects, the improvement of infrastructure and equipment, and the strengthening of postgraduate programs, as well as other activities referred to in Article 40, which are carried out by units and centers recognized at the national level for their excellence, in accordance with the National Science and Technology Program. For such purposes, CONICIT may use the resources created by this Law in accordance with Articles 43 and 44, those earmarked in its own budgets and funds arising from international cooperation.

26 26 CHAPTER VI Organization of the scientific community Article 66: With the resources created by this Law and others at the disposal of The National Council for Scientific and Technological Research (CONICIT) and the Ministry of Science and Technology (MICIT), both institutions shall promote the establishment and contribute to the development of at least two bodies for the organization of the national scientific community, a National Academy of Sciences and an Association for the Advancement of the Sciences. The functioning and administration of both entities shall be independent of CONICIT and MICIT, and they shall be represented in the National Science and Technology System. TITLE V Incentives for technological research and development in companies CHAPTER I Incentives for technological research and development by companies and private scientific entities Article 67: The State shall exempt from all taxes and surcharges, subject to the study and approval of the Incentives Commission, the equipment or material defined in the Regulations for this Law, so that they may be exported (sic)* and used exclusively in the development of scientific and technological research activities and projects at their various stages. Once five years have passed, beginning from the date of acceptance of the import permit, the General Directorate for Revenue shall authorize the release of the imported goods. *Should be understood as imported.

27 27 Tacitly repealed by Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions Article 68: Goods purchased on the local market shall be exempt from all taxes where they are intended for scientific and technological research or development projects which foster national production, subject to classification and study by the Incentives Commission. For the purposes of the release of the goods acquired under the protection of this Article, a period of five years must have passed, beginning from the date of issue of the corresponding invoice. Tacitly repealed by Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions Article 69: The Regulations shall define the selection criteria for the granting of the incentives provided for in Articles 67 and 68, preferably to: (a) companies which supply the State with goods and services that have a high technology content; (b) companies in which the results of technological innovation projects have boosted exports; (c) companies whose technological innovation projects are linked to the research centers of State institutions of higher education; (d) private scientific and technological entities or associations. Tacitly repealed by Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions Article 70: Exemptions shall be authorized by the Ministry of Finance, subject to the recommendation of the Incentives Commission, the signature of the respective incentives contract and according to the corresponding Regulations. Tacitly repealed by Law No of March 31, 1992 Regulating Exemptions in Force, Derogations and Exceptions

28 28 Article 71: The Ministry of Finance shall be obliged to ensure preferential, rapid and efficient handling of the customs formalities required for goods of scientific and technological interest to enter and leave the country. To this end, it shall allocate and train staff specifically for the handling of such formalities. It shall also set aside appropriate physical premises in the customs offices to this end. The system of temporary admission shall apply to the entry of those goods of scientific interest specified under the Regulations. Article 72: With regard to the application of the respective laws and contractual and regulatory clauses, strict controls shall be specified guaranteeing that each incentive is used solely for the development of scientific and technological research activities and projects, without prejudice to any supervisory, oversight or tax powers granted to the Comptroller General of the Republic or the tax authorities. Article 73: The Ministry of Science and Technology (MICIT) shall periodically award prizes to companies which have achieved noteworthy technological adaptation, assimilation or innovation in terms of scope or economic and social benefit for the country. The fields eligible for such prizes shall be industry, agriculture, livestock, fisheries and other areas defined by the National Incentives Commission. CHAPTER II Financing of technological innovation Article 74: The Ministry of Science and Technology, in consultation with the Incentives Commission, shall offer annually, in accordance with the rules and provisions of the Central Bank, a loan scheme which shall be implemented by the State commercial banks that belong to the national banking system, to finance technological development and rational energy use in new and established companies in any part of the country.

29 29 Amended via Article 43 of Law No of November 3, 1994 Regulating the Rational Use of Energy Article 41 shall serve as a basis for setting the annual amount that the National Council for Scientific and Technological Research (CONICIT) shall provide to supplement the resources which the banks earmark to this end and which make it possible to maintain appropriate interest rates for the purposes covered by this Law. Article 75: The National Council for Scientific and Technological Research (CONICIT) shall contribute to the technical evaluation of projects for the respective processing of bank loans, without prejudice to any studies or financial evaluations carried out by the bank aimed at ensuring the feasibility and quality of the technological innovation proposed. CHAPTER III Financing of technology management for industrial restructuring Article 76: The State shall promote national technology management in order to support the process of national industrial restructuring, with a view to fostering development and technology transfer in terms of processes involving manufactured goods, products, equipment, raw materials and other activities of value to companies from the national industrial sector, which have an impact on their competitiveness, on growth and on the survival of national and international markets. Article 77: For the purposes of the preceding Article, annual financial and technological support shall be provided, under the coordination of the Ministry of Science and Technology (MICIT) and within the framework of the National Science and Technology System, to public and private companies and to educational institutions which develop technology management programs.

30 30 CHAPTER VI State acquisition of goods and services in order to encourage national companies Article 78: The State, its companies and public entities shall use their ability to procure goods and services, as far as the subject matter of the procurement allows in each case, to foster and encourage the establishment and promotion of national technology-based companies, as well as technological innovation in existing companies, in addition to national consulting and engineering, in accordance with the National Science and Technology Program. Article 79: In accordance with Article 78, preference shall be given, on conditions of equality, to procurement from national suppliers. For such purposes, due consideration shall be given, in addition to price and quality parameters, to nationwide bids and the social and economic impact on, or benefit for, Costa Rican society produced by the bidder, in accordance with adequate social and economic indicators, barring any provisions to the contrary, in international conventions or loan agreements approved by the Legislative Assembly. CHAPTER V Incentives for technology-based companies Article 80: For the purposes of this Law, technology-based companies shall be defined as companies which have made technological innovation a priority in terms of maintaining and improving their competitiveness in the markets in which they operate, on the condition that the requirements contained in the Regulations are met. Article 81: Repealed by Article 22(i) of Law No of July 4, 2001 on Tax Simplification and Efficiency. Article 82: In accordance with Article 81 of this Law, technology-based companies shall enjoy the exemptions referred to in Articles 67 and 68 for the first three years of operation, once they have been registered.